Among the bustle of Newry's two thriving shopping centres, Buttercrane and the Quays, a coach full of eager shoppers pulls in. It is one o'clock on a rainy midweek afternoon, and families are out vying for the latest Christmas bargains.

You could be forgiven for thinking you are still in Dublin or Cork: only a few Northern Irish vehicle registration plates can be spotted among the majority of cars with licence plates from the Republic.

A coach carries dozens of men and women, with a destination board declaring they have just arrived from Tullow, Co Carlow. The coach driver is in for a long day before the shoppers return for the journey home.

Inside, shoppers dart around the various outlets, talking about how much they have just saved and how long the day looks set to be with a whole other shopping centre to conquer.

To say the retailers are upbeat is an understatement.

Gary Boyd, manager of menswear store Louis Boyd in Buttercrane, is beaming as he welcomes a Cork man who is looking to buy a new jacket. "Business is booming," he announces, while fitting the man with a new coat.

"Our customers are mostly from the Republic. I just sent a Carlow man off who bought two suits for £99. It would have cost him €300 where he is from. Maybe our prices are a little too cheap at this stage," he jokes.

Boyd is the ultimate salesman and is taking full advantage of a new and curious customer base, using his charms on the fresh array of Irish shoppers flocking through his doors.

He is one of the many retailers in the centre feeling optimistic for the future as the centre experiences a 2% rise in trade.

Buttercrane is pulling every tactic out of the bag to bring in customers from the south. Clothing shop DTwo is advertising that one euro equals one pound; it is a testament that even stores around them say they are "raking it in".

Across in The Quays, the Christmas buzz is tangible. Figures and posters of Santa Claus entertain hordes of children, clearly from both sides of the border. Sainsbury's is packed full, and navigating a way in and out without knocking someone's shopping out of their hands can be testing at times.

In the alcohol section, one of the busiest in the whole supermarket, the accents of those comparing prices out loud are not of the north. They are from Dublin, Kerry and Wexford.

John Curtis and his son Ross are up for the day from Greystones, Co Wicklow. They have filled up their trolley with alcohol and Christmas goods, on some of which they have saved almost 50% in comparison to prices in their local off-licence.

"We came up and we are saving almost 50% on our bill overall, and we are filling the car up. If you do this, the trip is more than worth it," says John Curtis.

"I came up mainly to buy motor parts. I bought a bumper for £32.50 outside Newry. The same was priced at €120 in Wicklow. When I arrived to pick it up, I had to wait in a queue of 10 other people from Ireland, who clearly have copped on to this too."

They pay for their Christmas goods and seem quite chuffed at their £221.33 bill, which covers everything that they need for the upcoming festivities.

Filling their boot, they point out different items which struck them as outstanding value.

A bottle of Tia Maria is almost €7 cheaper than at home. Thirty bottles of Budweiser cost £15. A litre of Bacardi superior is only £12, in stark comparison to the Republic price of €28.

Last month, Rosemary Garth of the Alcohol Beverage Federation of Ireland (ABFI) estimated the Irish economy has lost €400m this year to cross-border shoppers, and as the Curtis family survey their savings on drink and food, the figure does not seem like an exaggeration.

Toy shops in the Republic seem to be losing out too. Outside Smyth's, just a short hop outside Newry, manager Darren Connolly is on hand to greet his incoming army of Irish customers. Fifty percent of his customer base is now from the south, much more than he would have expected.

"There are so many shoppers from the Republic in here right now. They know what they want and they fill their trolleys up and buy in bulk. Sales are fantastic, much stronger than last year."

Two shoppers in the store have just arrived from Dublin. "We have two kids and we made a list of the toys they are looking for. Without a doubt, it is cheaper for us to come up here for the day and stock up. If we want to buy an iPod here, it is around €40 cheaper. It all adds up when the final bill comes through. You'd be crazy not to want to save money in a recession."

In Boots, a radio station announces that in Dublin, the bus corridor restrictions in the College Green area have been lifted for the Christmas period, as retailers shout about diminishing trade. But Dublin shoppers here are in no way concerned about whether they can drive around College Green. They have their eyes firmly on the M1.

The effect of that indifference can be seen in towns like Drogheda, Co Louth. The Scotch Hall Shopping Centre is everything a consumer could want.

It is clean, contemporary and brimming with top-brand shops such as A-wear, River Island, Topshop, Holland & Barrett and Waterstones, as well as restaurants and ample parking. But it is empty – especially compared to Buttercrane.

Shopper exodus

Drogheda became one of the prime commuter locations to spring up in the boom years. Now the town suffers twofold, under pressure from a worsening economy and an exodus of shoppers to Northern Ireland.

It's almost dark outside and the centre is deathly quiet. A few shoppers linger around Dunnes Stores. The restaurant, Croissanterie, is large but two men from Denmark sit alone with a cup of coffee each.

Four stores in the centre have closed over the past year, and one retailer remarks that the future of another four now looks uncertain. Many retailers say they are struggling with "ridiculous" rents which they can no longer afford anymore.

An assistant manager in the Gamestop store paints a grim picture. "We're a lot less busy now than last year. Without a doubt it is much quieter. Sure, just take a look outside," he says, motioning to the deserted entrance to the shop.

He has his own reckoning as to why the centre has taken such a turn for the worse. "There is not as much money floating around. We are doing fine business-wise, but there has been a drop in customers because they all seem to prefer going to Northern Ireland.

"Last year, it would have been crazy in here. We would have had back-up staff working. There will be no need for that for another while at least."

Teenage sisters Zoe and Eleanor Rogers live nearby and have been coming to the centre since its opening in 2005. They say Scotch Hall is a much quieter place nowadays. They come in looking for the odd bargain, or maybe to pass a day. But the sisters are saving their money to join the masses on the road to Newry.

The huge Dunnes Stores is almost eerie in its stillness. Just two hours before, a manager in Dunnes in Newry remarked on how incredibly busy trade was becoming.

"The place is buzzing, you can see it. I can't believe how many customers from down south we are seeing. It is not unusual anymore."

In Drogheda's Dunnes Stores, a stray customer wanders up an aisle, before hurriedly checking the time. The centre closes down for the evening.